Hi Friends,

I had been to the FAIRPRO '09 Fair.My Impression after seeing, is that prices are stagnating for all ongoing projects and builders are trying hard to hold them up.

Prices are 10-20% lower for new projects in the pipeline and for ready to occupy flats.

The discount offered at the stall was very less and were in the range 150-500 Rs/sqft max.

For the benefit of fellow members I am posting the project/price details of some of the properties.



Akshaya Foundations

Adora - OMR - 3750/sqft
Aikya - Adyar - 12500/sqft

Alliance Group - Orchid Springs - 3199/sqft

Arihant Foundations

Heirloom - Thalumbur - 2499/sqft
Escapade - Thoraipakkam - 4150/sqft
Villa Viviana - Maramalai nagar - starting from 1 Crore

Asvini Foundations

Amarisa-phase1 - Ramapuram - 4500/sqft
Amarisa-phase2 - Ramapuram - 4250/sqft
Akshita - Madipakkam - 3800/sqft

Casa Grande

Riveira - Palikkarnai - 3450/sqft - before discount 3600/sqft
Silver Oak - Perungudi - 4300/sqft - before discount 4500/sqft
Madhuban - Madipakkam - 3300 /sqft - before discount 3500/sqft
Mylapore - R.K.salai - 12500/sqft
Plots
Ponmar -785/sqft - before discount 825/sqft
Maraimalainagar - 790/sqft - before discount 825/sqft

CeeDeeyes - Chenni Pattinam

Basic Rate - 1600/sqft All Inclusive - 2075/sqft

Chaitanya shanthiniketan

Sunnyvale - Ayanavaram - 4850/sqft
Serena - Rajkilpakkam - 2550/sqft
Gardenia - OMR - 1900/sqft
Green Park - Chitlapakkam - 3300/sqft

DLF

Gardencity - 3200/sqft - was told slash in prices expected in coming weeks.

Doshi Housing

Etopia I and II - Perungudi - 3895/sqft
Nakshatra - Tambaram - 2995/sqft - Completion May 2010
Tranquil - Velachery - 5500/sqft - Completion February 2010
Trinity park - Santhoshpuram,Vengaivasal - 3195/sqft - Completion April 2009
Serene Couny-Villas - Santhoshpuram,Vengaivasal - 2200,2600/sqft
LlanStephan - Chetpet - 9000/sqft - Completion May 2009
Sri Mahalakshmi - Ayanavaram - 4495/sqft - Ready to Occupy

ETA

Rosedale - OMR - 3100/sqft
Le Chalet - Villas - Sriperambudhur - 26 Lakhs - 37 Lakhs

Hiranandani Upscale - 4200/sqft

Hiranandani Palace Gardens - 3475/sqft

Indus Housing

anantya - Navalur,OMR - 2299/sqft + 400(other charges)
riviera villa - Navalur,OMR - 90 Lakhs onwards
habittera - urapakkam,GST - 2399/sqft + 400(other charges)
amber - Saidapet - 4750/sqft

Jain Housing

Ankush Prakas - Kilpauk - 7500/sqft - Ready to occupy
Amrit Kailash - Strahns Road - 4500/sqft - Ready to occupy
La Gardenia - Nungabakkam - 7500/sqft - Ready to occupy
Ansruta - Valluvarkottam, nungabakkam - 10000/sqft - Ready to occupy
Antariska - Kodambakkam - 4500/sqft - Ready to occupy
Eiffel Garden - Vadapalani - 4250/sqft - Ready to occupy
Saagarika - M.R.C Nagar, sea facing - 10000/12500 - Ready to occupy
Green acres - Pallavaram - 3900/sqft - Ready to occupy
Abhishek - Selaiyur - 3500/sqft - Ready to occupy.

Jamals

Orchid - Palikkarnai - 3500/sqft
Palazzo - keelkattalai - 3700/sqft
Grandeur - Velappanchavadi(near saveetha dental college) - 3200/sqft

KGEYES

3 Projects on L.B.Road, Thiruvanmiyur - 6650/sqft
Delmare - Beach road,Thiruvanmiyur - 7000/sqft
Carolina - Velachery,Taramani - 4500/sqft
Swathi - Sastri Nagar,Adyar - 8500/sqft
Kalakshetra - 8000/sqft

Landmark Constructions

Tiara - Perungudi - 4000/sqft - Completion on August 2009
Aston Ville - Vadapalani - 5500 sqft - Completion on July 2009
Tudors Place - K.K.Nagar - 6500/sqft
The Address - Adyar - 11500/sqft
The Grange - Palavakkam - 7500/sqft
Cenralia - Chrompet - 2950/sqft - prelaunch
Gem Towers - AnnaNagar - To be launched.
Mahalakshmi Heights - Ashok Nagar - To be launched

L&T Estancia
Construction in Progress
1st-3rd Floor - 3950/sqft
4th -12 floor - floor rise charge of 20/sqft for each floor
13th - 17th - 4450/qft

L&T Eden Park - 3600/sqft

Mantri Synergy - OMR
2800/sqft - with 20/floor rise
Special offer - First Floor - all inclusive
1140 sqft - 33,67,000
870 sqft - 28,50,000

Navin Housing

Dayton Heights - Nelson Manickam road - 6500/sqft + 30/sqft floor rise from 2nd floor
Subha Mangala - Ramapuram - 4200/sqft
Brookfield - Nanmangalam - 3500/sqft
Merrylands - Medavakkam - 3500/sqft

Olympia Opaline - 3441/sqft - spl budget flats available

PACE Builders

Anna nagar west - 4195/sqft - before discount 4495/sqft
Selaiyur - 3195/sqft - before discount 3495/sqft
Valasarvakkam - 2795/sqft - before discount 3295/sqft

PS Srijan

The Grand - Velachery - 5250 sqft - before discount 5500/sqft - Floor Rise applicable from 4th floor

Rajparis

Harmony - Medavakkam - 3100/sqft

Rajarathnam Constructions

RC Prince Gardenia - Perambur redhill road,Kolathur - 3600/sqft

Rajkham

Independant houses - Ayyapathangal - 2600/sqft

Real Value

Sai Skanda - Velachery - 4200/sqft
Sai Surya - Palikaranai - 3800/sqft
OMR opp SIPCOT - 13.20 Lakhs onwards

Shriram Properties

Trishakti - SIPCOT - 2750/sqft
Shankari - 1990/sqft

Sidharth foundations

Tulip - k.k.nagar west - 4800/sqft - completion march 2009
Natura - medavakkam - 3100 /sqft - completion july 2009
Visvaleela - Annanagar - 8500 /sqft - to be launched
Dakshin - Urapakkam - price TBD - to be launched
upcoming projects in porur, thoraipakkam, rajkeelpakkam, mogappair.

SIS

Safaa - Urappakam - 3150/sqft

SSPDL

Crescent - Kelambakkam - Vandalur Road - 2500/sqft
Upcoming 2 villa project one in OMR and one in Sriperambathur.

Sumanth & Co

Thiruvanmiyur - 6000/sqft
Besant Nagar - 11500/sqft

TVH

Lumbini square - Pursaiwalkam - 5500/sqft + 30/sqft floor rise from 5th floor
Ouranya Bay(Premium) - OMR,Padur - 3100,3200 + 25/sqft floor rise from 5th floor
Ouranya Bay(Budget) - 2bhk - 20 Lakhs
3bhk - 30 Lakhs
Ekanta - Coimbatore - 3100/sqft
Revata - Mogappair east - 4500/sqft
Kamya - K.K,Nagar - 7000/sqft
Metro Golden Nest - Sriperambathur - 1bhk - 15 Lakhs
2bhk - 22 Lakhs
3bhk - 28 Lakhs

VGN Group

Minerva - Mogappair,Nolumbur - 2975/sqft
3 in 1, 4 in 1 - 3800/sqft
Mahalakshmi Nagar,Thiruverkadu - 3500/sqft
Plots
Mugalivakkam - 52 Lakhs/grnd
Selaiyur - 50 Lakhs/grnd
SPKoil - 34 Lakhs/grnd
Katankulathur - 22-27 Lakhs/grnd

Yuga Homes

Shem Park - chemmenachery - 3300/sqft
Upcoming in Koyambedu, R.A.Puram(8000/sqft)



There are lots of properties and also lots of potential buyers.There is sure a sense of uncertainity among the builders and also the buyers on when to make the next move.It was evident that correction in RE prices have started to happen.

Requesting members to respond with their thoughts on the current trend.
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  • Govts around the world increase taxes on stuff that they want to discourage public use.

    See Tobacco, Liquor, etc.

    Raising taxes on these products are good for the people.
    Of course people using them might get pissed off at first but it also helps them indirectly by discouraging the use.

    You do not want Govt to kill the industry or prohibit it.

    RE is similar to these products.

    All they need to do is make some money out of it and bring down the sales taxes for rest of products, or reduce bus fares, etc.
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  • Originally Posted by k11
    I do not understand your post.
    If I read it correctly, you want rent ceilings like Germany but you want high rents like UK (last para).
    .


    Apologies if it had confused you. They were two different post deliberately done to differentiate my observations (Germany) and opinion (UK).

    I'm not lobbying for rent control as we haven't descended into big brother state. My pov was as long as rents are unaffordable and RE is speculators market w/o regulation we will foresee gullible investors (incl end users) losing money.

    Originally Posted by k11

    Rent controls are bad for economy.
    Google rent control in Bombay. There are so many dilapidated buildings with rent controls there.

    I grew up in a building like that. Take it from me, you do not want me to occupy your flat worth 2 crores and pay you govt rent (which is probably rs500) for 40 years.

    Rules are already tilted so much towards tenants, why make it even harder.


    Chennai is not London. India cannot be compared to western countries.
    RE is driven by demand and supply, not amenities. Rising income and Indians becoming affluent is a natural phenomenon in developing countries.
    Central London is 3000 pounds, Central Chennai is 300 pounds. Chennai has at least half the population of London but one tenth of the rate.


    All I'm referring to is % yield not Chennai vs London. I understand the dynamics and naive to compare them both. There are concerns here on foreign money flowing into C.London RE. Avg Londoner income is approx 50k £/annum (3000£/sq ft is 6% of gross income) . Now compare that with Chennai's avg income/person and Rs 30000/sq ft in C.Chennai. Over-inflated London appears cheaper than Chennai. Don't we see the bubble here? I'm strong advocate of demand-supply! but I do have concerns over irrational exuberance .
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  • Originally Posted by Love4land
    I'm glad I've kindled interest in investor data


    True! But this link was found as a result of googling for 1 BHK apts in Hiranandani. :-)

    But yes the math you provided, of how you read the investor's update, was very useful!
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  • Originally Posted by Clairvoyant
    Apologies if it had confused you. They were two different post deliberately done to differentiate my observations (Germany) and opinion (UK).

    I'm not lobbying for rent control as we haven't descended into big brother state. My pov was as long as rents are unaffordable and RE is speculators market w/o regulation we will foresee gullible investors (incl end users) losing money.



    All I'm referring to is % yield not Chennai vs London. I understand the dynamics and naive to compare them both. There are concerns here on foreign money flowing into C.London RE. Avg Londoner income is approx 50k £/annum (3000£/sq ft is 6% of gross income) . Now compare that with Chennai's avg income/person and Rs 30000/sq ft in C.Chennai. Over-inflated London appears cheaper than Chennai. Don't we see the bubble here? I'm strong advocate of demand-supply! but I do have concerns over irrational exuberance .



    No problem, you do not have to apologize. It is just a forum and it is a general topic.

    I agree prices are crazy, but not totally out of reality.

    You are forgetting about the people with very high amount of net worth (many with big% of black money) buy in Central Chennai.
    I am sure their income is way greater.

    Avg apt cost in Central Chennai is 15K per sqft.
    15K/6% is 2,50,000.
    Ordinary people earn 2.5L, buyers in Central Chennai generally earn 25L on avg if you put together these HNIs.

    Look at my posts.
    https://www.indianrealestateforum.com/forum/city-forums/chennai-real-estate/29102-best-luxury-appartments-buildings-in-chennai/page5?t=31011&page=5
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  • Actually London is extremely expensive, so not a right comparison.

    Even Singapore/Hong Kong is.

    US is very cheap but high property tax and maintaince.
    Chicago high rise buildings are at $300-$350/sqft.
    Upscale ones, like Trump Towers are at $550-650/sqft.
    But they will have $25-40/sqft in property tax and maintenance every year.

    So a 2.5cr trump 1-bhk will look cheap, but you have to pay 35K a month in maintainance and 40K a month in property tax. Rent will be 1.5-1.75L a month (7-9% return), but will end up getting 75K-1L after taxes and fees (3.5%-4%). You get this return in Chennai too.

    In India, taxes and fees are very cheap thats why people can afford to pay more for the price.

    I think it is the same thing in Singapore and Hong Kong, they have lowest interest rates, so people can afford expensive houses.
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  • It is true that demand and supply decides the market price but it is not the only one. The other important factors are average income, infra, locality and so forth. No one would just go by geography and pay 1C for a flat next to slum. Flats in Chennai (not talking about suburbs that is 100 kms away) are highly inflated and not anymore affordable for any middle income group while it is a dream for middle/lower income group.
    If RE in Chennai is growing at the rate of 10% to 15% on an average in a weaker economy then isn't it a bubble? I know it will be hard to accept the truth as Indian RE market have never experienced such a bubble/spike or burst.
    Chennai RE market is full of speculators and big players, that is the major reason we see these price increase, this is getting similar to commodities trade. When few of these players screw up then we will see the end soon.
    When everyone enters you quit and when everyone quits you enter. Does this statement will be applicable to our RE market? Just a thought.
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  • Originally Posted by nikons
    It is true that demand and supply decides the market price but it is not the only one. The other important factors are average income, infra, locality and so forth. No one would just go by geography and pay 1C for a flat next to slum. Flats in Chennai (not talking about suburbs that is 100 kms away) are highly inflated and not anymore affordable for any middle income group while it is a dream for middle/lower income group.
    If RE in Chennai is growing at the rate of 10% to 15% on an average in a weaker economy then isn't it a bubble? I know it will be hard to accept the truth as Indian RE market have never experienced such a bubble/spike or burst.
    Chennai RE market is full of speculators and big players, that is the major reason we see these price increase, this is getting similar to commodities trade. When few of these players screw up then we will see the end soon.
    When everyone enters you quit and when everyone quits you enter. Does this statement will be applicable to our RE market? Just a thought.


    Are you an NRI?
    Did you miss the bus having this view?

    1C is not a big number for 3-bhk anymore. Construction cost of a flat itself in a upscale township comes close to 2000rs/sqft (40L), carrying cost another 20L.

    Prices are high, no question. But they are not ridiculous especially the city.

    Suburbs are high becasue everyone has bet on it to develop. Will it ever develop - yes, it will. When it will develop - we dont know, it could be 5-20 yrs no one knows.
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  • Originally Posted by k11


    I agree prices are crazy, but not totally out of reality.

    You are forgetting about the people with very high amount of net worth (many with big% of black money) buy in Central Chennai.
    I am sure their income is way greater.

    Avg apt cost in Central Chennai is 15K per sqft.
    15K/6% is 2,50,000.
    Ordinary people earn 2.5L, buyers in Central Chennai generally earn 25L on avg if you put together these HNIs.



    I agree London is not the right comparison as they have their own anamolies based on post codes. But Chennai growth was more inclusive in past. I do have concerns when exclusive island sprouts inside the city and people are driven out to sub-urb. As you mentioned Mumbai- I don't want Chennai to go Mumbai way esp. Like in 80s/90s (builder/mafia nexus).

    I say this as benefactor of Chennai RE. My investment albeit small, has grown 4x in 6 years , but I would rather prefer sustained long term growth as correction can be a excruciatingly slow process. When I mean correction, I don't expect massive fall on prices- even stagnation for 3 years is fall in price of approx 20% taking CPI Into account.

    If builders are pricing 15k/ sq ft we will see flight in capital to developed RE markets. It makes sense when 20L flat/plot appreciates 100-200% in 3-4 years but when we have instances where 2cr property becomes 4 Cr in same time frame it's time to exit.
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  • Originally Posted by k11
    Actually London is extremely expensive, so not a right comparison.

    Even Singapore/Hong Kong is.

    US is very cheap but high property tax and maintaince.
    Chicago high rise buildings are at $300-$350/sqft.
    Upscale ones, like Trump Towers are at $550-650/sqft.
    But they will have $25-40/sqft in property tax and maintenance every year.

    So a 2.5cr trump 1-bhk will look cheap, but you have to pay 35K a month in maintainance and 40K a month in property tax. Rent will be 1.5-1.75L a month (7-9% return), but will end up getting 75K-1L after taxes and fees (3.5%-4%). You get this return in Chennai too.

    In India, taxes and fees are very cheap thats why people can afford to pay more for the price.

    I think it is the same thing in Singapore and Hong Kong, they have lowest interest rates, so people can afford expensive houses.


    Precisely, on low interest environment in developed RE markets (mortgage interest rates 3-4% now) prices are depreciating; I don't have any problem HNIs splashing on properties as they already own many and they need few more safe-havens. It defies logic IMHO when middle class are made to buy this dream that 15k is standard rate for lifestyle (fair amount of Salaried are HNIs); take loan on today's high interest scenario? (10-15%) perfect recipe!

    On maintenance- aren't they charging 3-5Rs/ sq ft already ?
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  • Originally Posted by Clairvoyant

    On maintenance- aren't they charging 3-5Rs/ sq ft already ?


    3-5Rs is too low compared to western standards.

    If we use western stds, maintainance needs to be in the range of 30-50Rs a sqft atleast.

    I used the number as folks tend to compare India to west.

    If you multiply rent with exchange rate, then you should also multiply expenses too.
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  • Originally Posted by k11



    So a 2.5cr trump 1-bhk will look cheap, but you have to pay 35K a month in maintainance and 40K a month in property tax. Rent will be 1.5-1.75L a month (7-9% return), but will end up getting 75K-1L after taxes and fees (3.5%-4%). You get this return in Chennai too.

    In India, taxes and fees are very cheap thats why people can afford to pay more for the price.

    I think it is the same thing in Singapore and Hong Kong, they have lowest interest rates, so people can afford expensive houses.


    Well I reckon there's fundamental difference in the way we look at ROIs.

    3-4% return on low inflation (2%) , savings rate (.10%) market in developed RE is exceptional vs high inflation, depreciating rupee- only double digit returns could justify it. I don't want to shout its doomsday, just want to advise caution to all investors ( end-users).

    On maintenance/tax: I don't have first hand knowledge in states, but in UK- council tax works around 1500-2000£/ annum for 3bhk (paid by tenants). Maintenance varies from 1500-4000£ (Concierge services) . Yet it works out to be less than 15% of gross yield.
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  • I am not saying rental yeild is under inflation in western countries. It is the 3-4%, not 10% gross that people tend to assume. And yes, the 3-4% is above inflation of 1-2%.

    In India, capital increase easily takes care of inflation and rental yeild (3-4%) just gives a bit extra.

    London, Singapore, Hong Kong, even New York are on different track, people way too much for housing. They never dip down.
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  • Sobha has just released the investor concall for Q1-2012, I found this very interesting piece of information about how real estate prices are steadily increasing despite of seemingly stagnant economic growth for past 2 yrs:

    Question from Merrill Lynch:

    Couple of years back we always said Bangalore is a very affordable city and it is being extraordinarily well so average Bangalore pricing was about 4,000. So even if you take average house size at 1,500 you had 60 lakhs.

    Now it seems that has increased and especially for Sobha it has increased to 5,000+ so typical appartment ticket size has become a crore plus which means that the household income should be at least Rs. 22 – Rs. 25 lakhs. With IT growth looking a little slow not doing in double digits affordability being a little bit of concern now, do you see that a concern going forward.

    It is more of a now plus two years question not particularly a quarter related questions but a more macro question. Do you see Bangalore affordability losing out and going to Chennai way or something like that?


    Answer:
    Currently 40% of our customers they constitute from this IT sector. At the same time 44% of our customers who have booked our apartments from April ‘11 to March ‘12 have opted for a loan. 56% of the people have not yet opted for the loans. We have also observed that more than 21% of our customers they are NRI. Similarly we have also tried to breakup the sales bandwidth less than 50 lakhs between 50 to 75 lakhs, 75 lakhs to 1 crores, 1 crore to 2 crores and above 2 crores kind of a thing and our experience is that the people are in a position to afford the homes above 1 crore because most of these guys have a double income. The people who are buying maximum above 30 years of age they constitute 90% of our customer base, both who are above 40 years they constitute 62% of our customer base and these are the people they have a household income definitely of not less than Rs.20 to Rs.25 lakhs which should be good enough for them to ensure that they can maintain the lifestyle and also can afford to own a home either on a loan basis or through their family savings.


    http://www.sobhadevelopers.com/about/pdf/Investor-Concall/Q1-2012-2013.pdf
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  • Interesting stats, esp >50% not taking loan is surprising. wow! I mean wow!
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